“There was some concern in the markets that the strength [in manufacturing] early in the quarter might have faded in the end of the quarter, but that does not appear to be the case.”

The Labor Department also said yesterday that new claims for unemployment benefits declined slightly last week by 3,000 to 342,000, providing another sign the job market may be improving.

“Almost all the indicators point to a healthy rebound in manufacturing, which has been the Achilles heel for the economy in the past three years,” said Sung Won Sohn, chief economist for Wells Fargo & Co.

Just 126,000 net jobs were added in the past three months. The recovery is the weakest for job creation since World War II.

About 2.3 million jobs have disappeared since President Bush took office.

Construction spending also remained soft in February and inflation continued to grow, with wholesale prices edging up 0.1 percent in February.

Powering up

Two reports yesterday sounded upbeat notes about the state of U.S. manufacturing.

Yesterday:

* The Institute for Supply Management’s manufacturing index hit a rating of 62.5 – well above estimates of 59.5 – and indicating expansion.

* The Labor Department said new unemployment claims dipped 3,000 to 342,000.

Today:

* The Labor Department is to announce the number of jobs added to the national payroll in March.